Buckley, PJ orcid.org/0000-0002-0450-5589, Luise, C and Voss, H (2022) A Coasean Approach to Strategies of Ownership and Control: A Commentary on Forsgren and Holm’s (2021) “Controlling without Owning – Owning without Controlling”. Journal of International Business Studies. ISSN 0047-2506
Abstract
In a recent “Point” in this journal, Forsgren and Holm (J Int Bus Stud, 2021. https://doi.org/10.1057/s41267-021-00416-3) suggest that internalization theory cannot explain the external business relationships of multinational enterprises (MNEs). In contrast, in this Commentary we suggest that classic internalization theory is actually well equipped to do so, once scholars move beyond the simple market versus firm dichotomy (used mainly for pedagogical reasons in extant research). We build upon Coasean thinking, a foundation of the classic internalization perspective, to show that decisions on internalization are embedded in the institutional theory of the allocation of property rights. Property rights theory can explain ownership and control decisions, but also more broadly the allocation of decision rights in institutional arrangements. This broader focus on decision rights, beyond the simple ownership and control distinction, resolves the dilemma that Forsgren and Holm put forward. Any given distribution of decision rights does not come about in a costless, frictionless, or timeless fashion, which means that attention must be paid not only to the relative costs of different modes of operation but also to the costs of getting to a resolution among parties, to the process of doing so, and to the institutional and legal framework binding the arrangement. Ownership and control are shorthand terms for particular bundles of decision rights but these need to be examined in a broader context of decision rights.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2022, Academy of International Business. This is an author produced version of an article published in Journal of International Business Studies. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | internalization theory, international business theory, multinational enterprises, ownership and control strategies, property rights theory, institutional environment |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > International Business Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 28 Oct 2022 14:05 |
Last Modified: | 23 Dec 2023 01:13 |
Status: | Published online |
Publisher: | Palgrave Macmillan |
Identification Number: | 10.1057/s41267-022-00576-w |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:192529 |